South Ribble Council looking at spending Â£3.5m on building in SOUTHAMPTON
Cash-strapped South Ribble Council is looking at spending more than Â£3.5m buying an industrial unit 236 miles away in Southampton.
A secret report on the proposal has been leaked to the Post, outlining how the authority’s specialist lawyers have been instructed to deal with the acquisition, which would come out of reserves.
It is suggested the investment - Â£3.17m for the building, plus Stamp Duty and fees - would generate lease rental of Â£173,160 a year before management fees and VAT.
The council has declined to comment on the proposed deal, which has been described as “very dangerous” by the opposition leader, and flies in the face of the council’s own Invest in South Ribble publication, which promotes the area as “a great place to do business”.
Coun Paul Foster, leader of the Labour opposition, said: “I’m disappointed the confidential information has been leaked, but I think this deal is very dangerous, and if I were leader, it wouldn’t be happening.
“Any investment by this council must have a social value to the local community in South Ribble, and any investment outside the area would be deeply inappropriate.
“Secondly, it’s the worst time to be considering buying commercial property.
“The Bank of England governor has warned that commercial property prices could plummet 48 per cent if we get a hard Brexit. There are so many areas in South Ribble desperate for investment, and the money should be put into those things.
“We are wholly against the proposal, but sadly I don’t think we have a chance to do anything about it as it wasn’t put to a vote.”
A discussion about the property in Chandler’s Ford Industrial Estate, was held behind closed doors at a council meeting, days after Liberal Democrat leader Sir Vince Cable suggested the practice of councils purchasing property outside their area was “gambling with public money”.
The council is facing a deficit of Â£2.8m by 2019/20.